Growing Wealth Encourages Support For Estate Tax Cuts
May 8, 2000
On April 26, Hillary Rodham Clinton told a group of farmers in Upstate New York that the estate tax needs to be cut. "You ought to be able to leave your land and the bulk of your fortune to your children and not to the government," Mrs. Clinton said.
Clinton has clearly learned that estate taxes are not popular even among those who may not have to pay any. Last year three national polls asked voters if they favored abolishing the estate tax, and between 62 percent and 77 percent said yes.
Why would those with little wealth favor getting rid of a tax paid only by the rich (insofar as "rich" means having more than $675,000 in assets at death)?
- It is deeply ingrained in the public consciousness that anyone can get rich in America, and the latest Forbes 400 list of the richest Americans shows that 251 of them made it on their own, with only 149 inheriting some or all of their wealth.
- In recent years private wealth has risen at an extraordinary rate, to $42 trillion last year according to the Federal Reserve (see figure).
- And wealth is more evenly distributed in America than the rest of the world, according to the new "World Wealth Report" from Merrill Lynch.
This means that more and more Americans are moving up into the estate tax net, or expect to before they die.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, May 8, 2000.
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